It feels like whatever you do in today’s United States, you pay a tax for it. If you earn money, you get taxed. If you spend money, you get taxed. If you save money, you get taxed. If you invest money, you get taxed. Own a car, buy gas, smoke or enjoy the occasional beer? You get taxed. There’s no way to live your life without getting taxed for pretty much everything you do. Now a group of Democrats want to go one step further, and increase the taxes on something most of us don’t want to do at all – dying.
- It’s rare for any politician to push through real cuts to the tax burden on American citizens, but there have been some successes. One of those was the 2009 cut to estate tax (basically a tax on dying with too much money in the bank) pushed through by Republican legislators in 2009. Because there’s an asset threshold, this tax doesn’t affect the average American, but if you have a share in a family business it’s a serious problem.
- Building and running your own business, and passing it on to your kids is part of the American dream.The 2009 rate cut, and further relief on estate tax brought in by President Trump in 2017, were aimed at making this dream easier to achieve. A lot of Americans don’t realize that if they die and leave their business to their family, there’s a good chance it will have to be sold or liquidated to pay the tax due on it. The tax cuts made that much less likely, and exempted hundreds of thousands of small businesses altogether.
- Now a group of senior Democrats want to reverse those cuts and, in most cases, go even further. The Republicans have left the tax rate unchanged but sharply raised the value at which it kicks in. Democrats want to raise the rate, cut the threshold or even do both.
- Maybe the worst plan comes from veteran socialist Bernie Sanders. The Vermont senator wants to increase the maximum estate tax rate to an eye-watering 65 percent, which means if you’ve built a successful company the tax man is going to want nearly two-thirds of it before you’re even cold.
- New Jersey senator Cory Booker has his own idea and it’s nearly as bad as Bernie’s. Booker only wants to reset the tax to the way it was before 2009, which means the base rate rising from 40 percent to 45 percent and the threshold being slashed by around 40 percent to $3.5 million. That’s going to bring a lot more small businesses into the net – and some experts say Booker’s plan could extort just as much money as Sanders’s.
- Finally, the notoriously “progressive” Senator Elizabeth Warren of Massachusetts has a death tax plan too. Surprisingly, it’s not the worst. That’s not to say it’s great (it’s terrible) but while she does want to put the tax rate back to 45 percent, she only plans to lower the threshold to $3.9 million. And by the way, if $3.9 million sounds like a lot to you, remember the average family farm is in that ballpark.
- One of the biggest problems the US faces is the amount of money that passes through the hands of the federal government. Politicians should be allowing Americans to keep more of their cash, not plotting new ways to get their hands on it. It seems like senior Democrats still haven’t learned that lesson;they’re still plotting how to grab more cash from hard-working families when they’re at their most vulnerable.